More than a quarter of a century ago, when it looked as though the sun would never set on Mrs Thatcher, I published a book called Before the Oil Ran Out. My children, who arrived later, would sometimes pick the book from a shelf and puzzle at the title and the dust jacket, which showed a white garden bench under a dark sky. What did it all mean? I couldn't help at all with the cover image – it was striking but mysterious – but the title, too, defied an easy explanation. First, because the book contained few mentions of oil; second, because the past tense implied something historical while the subtitle, Britain 1977-86, suggested the present.

I had the idea for the title when I was walking through a London square around the time of the City's deregulatory "Big Bang" and Peregrine Worsthorne coining the phrase "bourgeois triumphalism" to describe the brash behaviour of the newly enriched: the boys who wore red braces and swore long and loud in restaurants. Champagne was becoming an unexceptional drink. The miners had been beaten. A little terraced house in an ordinary bit of London would buy 7.5 similar houses in Bradford. In the seven years since 1979, jobs in manufacturing had declined from about seven million to around five million, and more than nine in every 10 of all jobs lost were located north of the diagonal between the Bristol channel and the Wash. And yet it was also true that more people owned more things – tumble dryers and deep freezers – than ever before, and that the average household's disposable income in 1985 was more than 10% higher than it had been in the last days of Jim Callaghan's government.

Social peace had been bought by tax cuts and welfare benefits, and these had been largely enabled by government income from North Sea oil that by the mid-1980s was delivering the Treasury 10% of its revenues. The question was, how long would this bounty last? My estimate that by about 2010 Britain would "probably cease to be a significant producer of oil" was hopelessly wrong; present forecasts suggest reserves could last for another 30 to 40 years, depending on rates of exploitation and the success of new fields. On the other hand, revenues to the UK government are much less than they were – adjusted for inflation, receipts averaged more than £18bn a year in the 80s, compared to the £6.7bn estimated for the current year – and could of course, shrink much further if an independent Scotland won what the Scottish government considers its rightful share of the oilfields. It seemed at the time that the peace and plenty of late-period Thatcherism was a temporary phenomenon owing more to oil than to ideology – the book's title implied an era that would soon be historic.

The idea wasn't original. Economic journalists such as the Observer's Bill Keegan keenly promoted the argument, and in 1987 even Tony Blair felt able to say that North Sea oil was "utterly essential to Mrs Thatcher's electoral success". And yet the benefits of North Sea oil were never popularly acclaimed, or indeed much noticed. We didn't look at our disability allowances or wage slips and attribute any increase to men in hard hats far out to sea. Ditto with any moderation of deficits in the balance of trade. To adapt George Orwell's famous passage on coalminers, we didn't understand that all of us ("you and I and the editor of the Times Lit. Supp., and the Nancy poets and the Archbishop of Canterbury … ") really owed the comparative decency of our lives to poor drudges blackened to their eyes in mud, fitting drill bits on storm-lashed metal platforms 200 miles from the Scottish coast. They never came into it.

There were reasons for this. No politician has ever been keen to publicise luck as the source of national wellbeing – it takes away so much of their raison d'etre – and luck plays an especially big part in dictating how near a tribe, a village or a country lies to a workable carbon deposit. The emirs of the Persian Gulf were lucky, as in an earlier age were the large number of British landowners (Lord Elgin, the Dukes of Hamilton, etc) who discovered that they lived above coal seams. Still, whatever the happenstance of their location, we knew about coalminers because they lived together in communities and because pyramids of colliery waste marked the skyline in many parts of Britain, including unexpected places such as Somerset and Kent. Oil-platform workers, in contrast, have homes scattered across the UK and come together only on the helicopters flying them out to workplaces that civilians will never see with the naked eye, unless they sail in fishing boats. Also, with wages averaging £64,000 a year, they are too well paid to be pitiable.

But the chief cause of the industry's invisibility at its 1980s height was surely that Britain had become increasingly London-focused, and regarded any kind of manufacturing or extractive industry as "northern" and old-fashioned. According to the historian Christopher Harvie, the country had seen no greater civilian project since navvies built 5,000 miles of railway in the late 1840s; the North Sea's story of underwater exploration and daring engineering would have thrilled earlier generations. Instead, Harvey writes, "the impact of oil on the British metropolitan intelligentsia and its imagination was practically zero". In Scotland, where oil had immediate political, environmental and social repercussions, journalists took a greater interest, but even there the emblematic figure of that decade was the aforementioned shouty boy from a bank rather than a roustabout on the train home from Aberdeen, taking advantage of the buffet car after his teetotal stay at sea.

Oil's failure to intrude into the public debate, particularly in southern Britain, had an important consequence. "Not fixing the roof while the sun shone", the favourite Tory accusation against the Blair/Brown regime, held true in spades for the way oil receipts were spent in the Thatcher years. Other countries – Norway is the leading example – used their tax on oil to modernise infrastructure and industry, or hoarded some of it in a sovereign wealth fund for the proverbial rainy day. Instead the Treasury used every last pound of it to set against current expenditure, leaving nothing for capital projects or the post-Thatcher future. No roofs were fixed: in this respect, Mrs Thatcher as the prudent housewife is a piece of make-believe.

Oil inflated sterling's value in the 80s, destroying exports and industries, and some analysts believed that only when it ran out and sterling declined could Britain flourish again as a trading nation; the running-out would be a cloud with silver lining. "But," as I wrote in my strangely named book, "given the lack of industrial investment during Britain's peak oil years, it is difficult to see what will provide our living." There are many sentences in the book I never want to read again – rereading can be a painful experience. But that one at least has the comfort of rightness. Neither Big Oil nor the Big Bang has saved us – what will, O Lord, what will?